Planned tunnel (dotted section) would give buses an easier route to and from the east of the city

A bus tunnel is being promised as part of a $160 million extension of the O-Bahn guided busway, if Labor is re-elected at the March 15 South Australian poll.

Buses would travel 500 metres in a tunnel below Hackney Road from near Plane Tree Drive, under the busy North Terrace and Rundle Road intersections, and emerge next to the east parklands near East Terrace to connect with the cross-city bus lane.

A previous extension plan was scrapped when the Federal Government withdrew its funding in 2011.

Premier Jay Weatherill says the proposed bus underpass would cut commuting time on the north-east route by at least four minutes.

"With this investment what we will do is reduce travel times into the city by about 20 per cent," he said.

"This is the slowest part of the journey. What it will allow us to do is not only speed up the journey for the O-Bahn passengers but it will also remove about 60 to 70 bus movements an hour in peak hour."

Opposition transport spokeswoman Vickie Chapman says Labor's project is $100 million more expensive than the federally-funded plan which was scrapped.

"All that is clear is that this is a desperate attempt of a Premier to make announcements to try and win an election with absolute reckless disregard for the financial position this state is in," she said.